The Union government set to take on an extra Rs 90,000 crore loan for the Mumbai–Ahmedabad High-Speed Rail project. They have chosen not to seek more borrowing from the Japan International Cooperation Agency (JICA) despite a significant rise in overall costs.
90,000 crore loan for Mumbai–Ahmedabad Bullet Train project
The 508-kilometre bullet train corridor initially estimated to cost around Rs 1.1 lakh crore. It is now projected to cost about Rs 1.98 lakh crore, which is an increase of nearly 83 %. This rise is due to delays, implementation challenges, and other related factors.
Officials familiar with the situation said the Railway Ministry will soon present a revised cost estimate to the Union Cabinet and request approval for additional budget support.
Finance Ministry support this development
The ministry plans to work with the Finance Ministry to fill the funding gap and ensure the project complete on time. JICA is currently financing about 81 % of the original project cost through an Official Development Assistance (ODA) loan. This loan has a very low interest rate of 0.1 % per year and a repayment period of 50 years, including a 15-year moratorium.
However, sources shows that no additional loan requested under this same arrangement for the new budget.
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